The Commonwealth Bank has called on the MFAA to introduce a new 'Certified Practising Certificate' across the broker market, to improve broker ability to submit quality applications.
CBA executive general manager, third party and mobile banking, Kathy Cummings, said while the current MFAA requirement to raise the bar to a Diploma qualification was a good move, she was unsure if this was adding any value to improving submission quality or conversion rates.
Instead, Cummings said a new more practical certification of ability was required, to ensure that the industry was 'more sustainable' in the long run through the creation of channel efficiencies.
At present, Cummings said that overall, submissions require repeated rework by the bank, with some files being touched up to 10 times and files going back to credit on average 1.4 times.
Cummings said a Certified Practising Certificate would ensure brokers know what they are doing.
"We are talking about it with the MFAA. We are thinking about the sustainability of the industry, and will get behind things that add value to the industry," Cummings said.
According to Cummings, the industry currently had its "back against the wall" when it came to broker commissions due to increased funding costs, and efficiencies needed to be created.
She said if the 'straight-through-processing' rates of broker channel-sourced loans were not improved, this could impact commissions in future, in addition to the other cost factors involved in funding mortgages.
At present, CBA has a straight-through-processing rate for loan applications of 34%, but said that increasing this to 50% could improve efficiency, including freeing up time for brokers themselves.
Cummings suggested that a new practising certificate requiring 90% submission quality from brokers for accreditation could be one element that would 'clean up the industry immediately'.
CBA's top five problems with loan applications from brokers are overall completeness, supporting documentation, ID requirements, FHOG-related material, and errors with the loan documents themselves.
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